Rent continues to bite as first-time buyers spend £163,047 on rent before buying

First-time buyers in the United Kingdom now spend an average of £163,047 on rent before purchasing a home, up 40% from a decade ago, according to fresh research from specialist mortgage lender Perenna. The cumulative rent paid before buying has risen by about £46,621 since 2015, and the sum today could fund roughly a 60% deposit on the average home. House prices climbed to about £270,000 in July, according to the Office for National Statistics; a 10% deposit on this price runs to about £27,000.

Mortgage affordability rules mean some buyers cannot borrow as much as they might need, with estimates around 4.5 times salary for many applicants. Still, lenders are starting to loosen these rules in response to regulatory changes announced by Chancellor Rachel Reeves.

First-time buyers have rented for 12.8 years on average, up from 11.4 years a decade ago, assuming they begin renting at age 21, according to Perenna. Colin Bell, founder of Perenna, said: "There is a time and a place for renting. While some may make the personal choice to rent in the long term, others are forced into a seemingly never-ending cycle of rising costs. The current infrastructure of the property market means we're encouraging our young people to get trapped into long-term renting over purchasing a home. Renting is ultimately money spent without return. Unlike mortgage payments, which build equity, rent offers no stake in the property and often doesn't even strengthen someone's credit profile - despite renters frequently paying more each month than they would with a mortgage. With house prices increasing overall, they could have spent their hard-earned money on an appreciating asset, but the market is failing to provide the right financial mechanisms to help lift buyers onto the ladder."

There's little respite for renters as monthly rents rose 5.7% in the year to August, official figures show. The average rent now stands at £1,348 a month, though this may be split among multiple tenants. Wales posted the biggest regional hike at 7.8% to £811, while England has the highest average of £1,403. In Scotland, payments climbed 3.5% to £1,002. London is the region with the highest rent at £2,253 on average while the lowest is £745 in the North East.

Ben Twomey, chief executive at Generation Rent, said: "Homes are the foundations of our lives, but rents continue to rise faster than our wages, swallowing more and more of our income. We rightly have caps on our energy and water bills, but the same protections don't exist to stop landlords from pricing us out of our homes. The Government can and must act through devolving powers to Mayors to limit rent increases in their areas."

Bell says more low-deposit solutions are needed to get young people onto the property ladder. There are several mortgage lenders offering loans with deposits of less than 5%, for example Newcastle Building Society which launched a 2% deposit deal last week. However, these often come with higher interest rates, as well as restrictions on who can apply.

The broader market context remains challenging for would-be homeowners as affordability pressures persist and policy tweaks unfold. Analysts note that the combination of rising rents and higher house prices continues to constrain the path to ownership for many would-be buyers, even as lenders experiment with new products and regulatory changes.

Overall, the latest data highlight a persistent affordability squeeze for prospective homeowners in a market where rents and prices continue to move in tandem with policy and lending shifts.